Retail inflation rises to 4.91% in November as prices of fruits, vegetables climb

India's retail inflation in the month of November rose to 4.91 per cent, towards the upper limit of the Reserve Bank of India's target range, due to a sharp rise in prices of fruits and vegetables, government data showed on Monday. The CPI-based inflation was at 4.48 per cent in October and 6.93 per cent in November 2020.

The RBI has been mandated by the government to keep retail inflation at 4 per cent with a margin of 2 per cent on either side. The data in November is within the central bank's target for the fifth consecutive month.

Further, the data released by National Statistics Office (NSO) showed food inflation accelerated to 1.87 per cent in November from 0.85 per cent in October. Core inflation, which is the non-food non-fuel component of the CPI basket, stood at 6.1 per cent in November against 5.8 per cent in October.

Brent crude oil, India's biggest import, was down over 16 per cent last month. It was trading around $76 a barrel on Monday.

The Reserve Bank, which mainly factors in the retail inflation while arriving at its bi-monthly monetary policy, expects the inflation print to be somewhat higher over the rest of the year as base effects turn adverse. According to the RBI, it is expected that headline inflation will peak in the fourth quarter of the current fiscal and soften thereafter.

The central bank last week had kept the repo rate unchanged at 4 per cent and decided to continue with its accommodative stance in the backdrop of concerns over the emergence of the new COVID-19 variant Omicron, but it also said that price pressures may persist in the near-term. This was the ninth time in a row that the Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, maintained the status quo.

India's industrial production growth remained subdued for the second straight month and expanded by 3.2 per cent in October, mainly due to the waning low base-effect while mining, power and manufacturing sectors performed well, data released on Friday showed. The manufacturing sector, which constitutes 77.63 per cent of the Index of Industrial Production (IIP), grew 2 per cent in October, according to the data released by the National Statistical Office (NSO).